MARKETING STRATEGIES AND POLICIES

OF HINDUSTAN UNILEVER LIMITED

A major project report

Submitted in partial fulfillment of the requirements for BBA(GEN)

semester VI programme of Guru Gobind Singh Indraprastha
University,Delhi

By:
Mitesh Kumar Verma
Enrl.no.:0551221705
BBA(General)

Delhi College Of Advanced Studies

B-7, Shankar Garden ,Vikaspuri
New Delhi-110018

Declaration

I here declare that the major project, entitle marketing strategies

and policies of Hindustan Unilever Limited, is based on my original
study and has not been submitted earlier for any degree or
diploma of an institution/university.
The work of author(s), wherever used has been acknowledged at
appropriate places.
Place:

Candidates signature

Date:

Name:
Enrol.no.:

Countersigned
Name:
Supervisor
Delhi college Of Advanced Studies

PREFACE
Hindustan Unilever Limited (formerly Hindustan
Lever

Limited)

is

Indias

largest

Fast

Moving

Consumer Goods company with a sales turnover of more than

Rs.10,000 crores. At least one of its products reaches two thirds of
Indian households. It has 35 brands and employs more than 15,000
people.

Its

promoter

company

Unilever,

fortune

500

multinational, holds 51.42% equity. Unilever has presence in more

than 100 countries worldwide in FMCG sector.
Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast
moving consumer goods (FMCG) company based in India. The
company focuses on efficient delivery to consumers with an
improved supply chain, brand building initiatives and innovation,
which has helped the company to sustain its leadership position in
the overall FMCG category in India.
This project is a sincere effort to look for the market potential in
FMCG industry. A descriptive research procedure had been applied
to come to the conclusions of the project. A detailed questionnaire

had been prepared and the responses of the concerned people had
been collected for the analysis.

ACKNOWLEDGEMENT
I am grateful to many people who have contribution to this project.
In particular I would like to thank my faculty, MS.MEENU
ARORA, who have helped me through this project in their own
special & affordable way.
My project has been a successful task because of cheerful devotion
of always lend the support, I needed of. I have been getting all
the guidance, Dr.

NARENDRA MOHAN, the director of our

college and my faculty members who possibly could get through

out the making of this project from them.They always been
ready & also have to clarify all my queries from time to time.
Last but not least I would also like to thank the library members
and computer laboratory members who also have been supportive
during the making of this project by providing adequate books as &
when required for.

Finally I extend my sincere thanks to all those who have given me

encouragement throughout, without whose generosity this project
would have been difficult for me to complete.

INTRODUCTION
The Hindustan Unilever Ltds(HUL) Inc has taken the opportunity
to offer us a broader view of FMCG category. The Hindustan
Unilever Ltd (HLL) is Indias no.1 FMCG is able to share with their
market insights based upon unparalleled breath of consumer goods
experience.
Hindustan Unilever Ltd (HUL) has grown from strength to strength
with new technologies being introduced to make the HLL consumer
goods business, one of the most efficient in the world. The
companys history dates back to 1931 when Unilever set up its first
Indian subsidiary, Hindustan Vanaspati Manufacturing Company,
followed by Lever Brothers India Limited (1933) and United Traders
Limited (1935). These three companies merged to form Hindustan
Lever Limited in November 1956. Effective July 19, 2007 the
company has changed the name to Hindustan Unilever Limited.
Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast
moving consumer goods (FMCG) company based in India. The
company focuses on efficient delivery to consumers with an
improved supply chain, brand building initiatives and innovation,

which has helped the company to sustain its leadership position in

the overall FMCG category in India.
Hindustan Unilever is Unilever's main operating business in India. It
is the country's biggest consumer goods company, and far and
away the leading advertiser. HUL inhabits virtually every sector of
the consumer goods market, including several not occupied by
Unilever in other markets such as preserves and bakery products,
and is also one of the countrys top five exporters. In addition to
FMCG products it is the country's biggest exporter of tea. It is
generally acknowledged to be one of India's best-run businesses,
although performance slowed dramatically between 2000 and
2004, prior to restructuring.
Unilever, which sells soap to more than 500 million Indians, may
see global revenue growth slow in 2010 as Procter & Gamble Co.
and ITC Ltd. step up marketing in Asia's third-biggest economy.
The world's second-largest consumer products maker has relied on
accelerating shipments of Surf Excel detergent in India to make up
for sluggish sales in Europe.Now Cincinnati- based Procter &

Gamble is stocking Indian stores with Olay skin- care products after
nearly halving the local prices of Ariel and Tide detergents in 2004.
Asia and Africa, which make up about a third of Unilever's
worldwide sales, will see their share of the company's growth fall to
2 percent in 2010 from 3.3 percent in 2007, according to Brusselsbased brokerage Petercam SA. Revenue from the two continents
rose 11.4 percent in the first nine months of last year, helping
offset 1.9 percent growth in Europe and 4.2 percent in North and
South America.
Unilever's overall sales growth will slow to 4.9 percent in 2010 from
an estimated 5.3 percent in 2007, according to the median of five
analysts in a Bloomberg survey.

Hindustan Unilever A 75 Year Commitment

15,000 employees
1,200 managers
2,000 suppliers & associates
75 Manufacturing Locations
45 C&FAs, 4,000 Stockists
Total Coverage 6.3 Mln Outlets
Direct Coverage 1 Mln outlets

Population of INDIA: 1027 Mln

5,545 Towns
2.5 Mln outlets
6,38,000 Villages
5.0 Mln outlets

HISTORY
OF
HINDUSTAN UNILEVER LTD
It was in the summer of 1888 that Unilever of England first
marketed Sunlight soap in India. This was followed by brands
like Pears and Vim. Vanaspati was launched in 1918 and
Dalda came to the market in 1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan
Vanaspati

Manufacturing

Company,

followed

by

Lever

Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HUL in
November 1956.
A number of prominent companies came into the HUL fold as
result of Unilevers international acquisitions. These included
Brooke Bond (1984), Lipton (1972) and Ponds (1986).

 In 1993, Tata Oil Mills Company (TOMCO) merged with HUL.

Two years later, HUL and yet another Tata company, Lakme
Limited, formed a 50:50 joint venture, Lakme Lever Limited.
Subsequently in 1998, Lakme Limited sold its brands to HUL
and divested its 50 per cent stake in the joint venture to the
FMCG giant.
HUL formed a 50:50 joint venture with the US-based Kimberly
Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which
markets Huggies diapers and Kotex sanitary pads.
HUL has also set up a subsidiary in Nepal, Nepal Lever Limited
(NLL), and its factory represents the largest manufacturing
investment in the Himalayan kingdom. In a historic step, HUL
picked up 74 per cent of the equity of Modern Foods from the
Indian government.
In 2002, HUL acquired the government s remaining stake in
Modern Foods.
FMCG major Hindustan Unilever Limited (HUL), formerly
known as Hindustan Lever Limited, employs 36,000 people,

including over 1,350 managers. It is one of the earliest MNCs

to have entered India

ORGANIZATIONAL STRUCTURE

Managing
Direc
tor

General
Mana
ger

Vice President

Marketing

Manufacturin Sales
g

Finance

Distribution

PRESENT STATUS
Hindustan Unilever Limited (HUL) is India's largest Fast Moving
Consumer Goods company, touching the lives of two out of three
Indians with over 20 distinct categories in Home & Personal Care
Products and Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million tonnes and

sales

of Rs.10,000crore.
HUL is also one of the country's largest exporters; it has been
recognised as a Golden Super Star Trading House by the
Government

of

India.

The mission that inspires HUL's over 15,000 employees, including

over 1,300 managers, is to "add vitality to life." HUL meets
everyday needs for nutrition, hygiene, and personal care with
brands that help people feel good, look good and get more out of
life. It is a mission HUL shares with its parent company, Unilever,

which holds 51.55% of the equity. The rest of the shareholding is

distributed among 380,000 individual shareholders and financial
institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke
Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household
names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice
cream and culinary products. They are manufactured over 40
factories across India. The operations involve over 2,000 suppliers
and associates. HUL's distribution network, comprising about 4,000
redistribution stockiest, covering 6.3 million retail outlets reaching
the entire urban population ,and about 250 million rural consumer.
HUL has traditionally been a company, which incorporates latest
technology in all its operations. The Hindustan Unilever Research
Centre (HLRC) was set up in 1958, and now has facilities in Mumbai
and Bangalore. HLRC and the Global Technology Centres in India
have over 200 highly qualified scientists and technologists, many
with post-doctoral experience acquired in the US and Europe.

HULS NEW GROWTH STRATEGY

After having fought a bitter price battle for market share with its
rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the AngloDutch consumer goods company Unilever Plc, is now working on a
new growth strategy for its laundry business.
Price cut or hike is not a long-term growth strategy. Pricing, in
fact, is now passe, insists Sudhanshu Vats, category head, home
care.
Our strategy for growth, now is focused on product innovation,
new consumer and retail trends and aggressive marketing and
promotions, he said.
This comes even as Unilever is scouting for a potential buyer for its
laundry business in the US.
HUL says it is quite upbeat about the segment and says the
laundry segment is one of its key growth areas.

We have done key innovations across the product portfolio and it

is working for us, says Vats. We successfully migrated from Rin
Supreme to Surf Excel and Wheel Smart Srimatiwhich was rolled
out in 2006is also on the right track.
HULs market share in the laundry segment grew to around 37.8%
in the quarter ended June from 35.5% in the same period last year,
according the market research firm ACNielsen. However, this time,
the increase was not at the expense of price war with its
multinational rival Procter & Gamble Co. P&G also gained 0.5
percentage points, up to a 7.6% share. Nirma Ltd, the Ahmedabadbased manufacturer, however, saw its market share dip by 1.7%
percentage points to 13.5%.
Wheel, a value brand that, according to Vats contributes around
50% of HULs laundry segment revenues, increased its market
share by 2 percentage points in the same period, with a total share
of about 18%.
According to ACNielsen, the laundry industry in India was worth
Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesnt

report its laundry revenues separately but puts them under the
soaps and detergent category.
In 2006, HULs soaps and detergents segment contributed around
Rs5,596 crore to the companys total sales of Rs12,103 crore.
Laundry has been an attractive segment in the past and is likely
to keep growing in the near future. The recent price war between
companies led to erosion in their profitability but now, the industry
is stabilizing, says Unmesh Sharma, an analyst at Macquarie
Securities here.
According to Vats, the laundry business is witnessing a surge in
demand from cities and HUL is focusing on Tier I and II cities to tap
that demand.

Consumers today are buying more clothes, says Vats. Trends

suggest that the usage of detergents has gone up as a result. Also,

with premium quality of clothes, people want to use better and

branded products.
Still, analysts remain cautious. Some of HULs recent moves, such
as promotional campaigns and advertising, seem right, says
Macquaries Sharma. Still, it is too early to say what result their
new strategies will yield.

PRODUCT PROFILE
HULs business activities are divided into four broad areas:
Home and personal care

personal wash, fabric wash, home care, oral care, skin care,
hair care, deodorants and talcs, colour cosmetic
Foods

tea, coffee, branded staples, culinary products, ice creams,

Modern Foods ranges

 New Ventures

Hindustan Lever Network, Ayush ayurvedic products and

services, Sangam, Pureit water purifiers.
Exports
HPC, beverages, marine products, rice

BRANDS

HUL s brands are household names across the country. They

include:
Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond s, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, KnorrAnnapurna and Kwality Walls.

SWOT ANALYSIS
Strength

1. Hindustan Unilever Limited (HUL) is India's largest Fast

Moving Consumer Goods company, touching the lives of
two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages..
2.

Due to its long presence in India has deep penetration

20 consumer product category, over 15,000 employees,

including over 1,300 managers, is to "add vitality to life."
3. The company derives 44.3% of its revenues from soaps
and detergents, 26.6% from personal care products, 10.5%
from beverages, and the rest from foods, ice creams,
exports, and other products.
4. Low cost of production due to economic of scale. That
means higher profits and / or more competitioners. Better
market penetration.
5. HUL is also one of the country's largest exporters; it has
been recognised as a Golden Super Star Trading House by
the Government of India.
Weakness
1.

Continuous threat from other competitors.

Opportunities
1. Increasing per capita national income resulting in
higher disposable income.
2. Growing middle class and growing urban population.
3. Increasing gifts cultures.
4. Increasing departmental stores concept impulse @
at cash counters.
5.

Globalization.

Threats
1. HLL's tea business has declined marginally, reason is
that, cost pressure is likely due to rising crude and
freight costs.

PEST ANALYSIS
P: since the budget range is decontrolled, no political effects are
envisaged.
E:

1) increasing per capita income resulting in higher

Disposable income
2) Growing middle class/urban population increase in
Demand
3) Low cost of production better penetration

S:

1) Per capita consumption expected to increase fashion

2) Increasing gifts culture increase in demand

T:

Will have to reinforce technology to international levels

Once India is a fully free economy.

FIVE PS OF MARKETING
Product
Satisfaction suffices. But delight dazzles the average company will
compete

for

customer

by

conforming

to

her

expectation

consistently. But the winner will surpass them by constantly

exceeding her expectation, delivering to her door step additional
benefits which she would never have imagined possible. Hindustan
Unilever Ltd(HUL) offer such product. The wide variety products
offered by the company include:
The companys popular products include:

Bathing soaps:
Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

Laundry items:
Surf Excel, Rin and Wheel

Skin care:
Fair & Lovely, Ponds and Vaseline

Hair care:
Sunsilk and Clinic

Oral care:
Pepsodent and Close up

Deodorants:
Axe and Rexona

Colour cosmetics:
Lakme

Ayurvedic:
Ayush

Tea:
Brooke Bond and Lipton

Coffee:
Bru

Foods:
Kissan, Annapurna and Knorr

Ice cream:

Kwality Walls .

Pricing
Make no mistake. Second P of marketing is not another name for
blindly lowering prices and relying on this strategy alone to
increase sales dramatically. The strategy used by Hindustan
Unilever Ltd(HUL) is for matching the value that customer pays to
buy the product with the expectation they have about what the
production is worth to them.
Hindustan Unilever Ltd(HUL) has launched various products which
cater to all customer segments. So every customer segment has
different price expectation from the product. Therefore maximizing
the returns involves identifying right price level for each segment,
and then progressively moving through them.

Physical Distribution Place

BRAND ISNT THE ONLY ANY MORE. Marketers and finance
manager need a new term to evaluate their business:
Distribution Equity. It takes much more time and effort to build,
but once built, distribution equity is much together to erode.
The fundamental axiom of Indian consumer market is this:
You can set up a state-of the-art manufacturing facility, hire the
hottest strategies on the block, swamp prime television with best
Ads, but the end of it all, you would be know of selling your
products. The cardinal task before the Indian market is managing is
to shoe-horn its product on retail shelves. Buyers are paying for
distribution equity not brand equity and market shares.
Why does the company need distribution equity more anything in
India? With technology and competitive pressure slash in it is
becoming increasing difficult for marketers to retain a unique
product differentiation for ling period. In a product and price parity
situation, the brand that sells more is the one that reaches the
highest number of customers.

India The operations involve over 2,000 suppliers and associates.

HUL's distribution network, comprising about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire
urban population, and about 250 million rural consumers.television
has already primed and population for consumption, and the
marketer who can get to the to the consumer ahead of competition
will give a hard to overtake lead. But getting their means
managing wildly different terrains-climate, language, value system,
life style, transport and communication network. And your brand
equity isnt going to help when it comes to tackling these issues.
Own distribution network consist of clearing and forwarding (C&F)
agents & distribution stockiest. This network of distribution can
either contact wholesalers and which in turn retailers or the
distributors can contact to the retailers directly.
Once

the

stock

product

reaches

retailers,

the

prospective

customers can have access to the product.

Hindustan Unilever Ltd(HUL) distributes the product in the manner
stated above.

Hindustan Unilever Ltd(HUL) distribution network has expanded.

Beside use of improved logistics, Hindustan Unilever Ltd(HUL) is
also attempting to improve the distribution quality. To address the
issue of product stability, it has installed visi colors at several
outlets. This helps in maintaining consumption in summer when
sales usually drops due to the fact that the heal effects product
quality and thereby off takes.
Looking at the low penetration of few products, a distribution
expansion would itself being incremental volume. The other reason
is arch rival Procter & Gamble Co. reaches more than a million
retailers.
This increase in distribution is going to be accompanied by
reduction in channel costs. Hindustan Unilever Ltd(HUL) marketing
costs, at 18% of total costs, is much higher than Procter & Gamble
Co. The company is looking to reduce this parity level. At
Hindustan Unilever Ltd(HUL), they believe that selling FMCG is it
like selling soft drinks.

Promotion
If an advertisement is to communicate effectively, the receiver
must at least half want it to, and be prepared too take step toward
the sender. Effective advertising is rarely hectoring or loudly
explicit. It often both attracts and generates arm feelings. More
often than not, a successful campaign has a stronger element of
the unexpected a quality that good advertising shares with much
worthwhile literature.
To

penetrate

into

the

inner

recesses

of

her

memory,

communication must first ensure exposure, grab her attention

evoke her comprehension, grab her acceptance and then extract
retention

competing

with

thousands

of

other

units

of

communication trying to do the same.

Finding showed that the adults felt too conscious to be seen
consuming a product actually meant for children. The strategic
response address the emotional appeal of the band to the child
within the adult. Naturally, that produced just the value vacuum
that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter it
was the job of the advertising to communicate customer the
wonderful feeling that he could experience by re-discoursing the
careful, unself conscious, pleasure seeking child within himself
a graft these feeling onto the Ad campaign like hasso to khul k
hasso for close up, cream bathing bar for dove soap and

daag ache hai for surf excel have been sure shot winner with
the audience.
It has also launched Pureit, a home water purifier which supplies
drinking water without boiling/need of electricity , As well as
outdoor

and

radio

ads,

ad

agency

contract

has

created

communication for cinemas and even ATM machines for the brand.
All ICICI s ATM a message flashes on the screen as soon as
customer insert his ATM card. Something familiar is planned for
phone-book as well. In cinemas, Hindustan Unilever(Ltd)has a
message on-screen just before the lights are dimmed to give them
a chance to get their product There will also be after dinner
sampling in restaurants to begin with, 30 catteries in Mumbai
have been selected.
Ad spend in 2000 was about 14% of sales and the management
said that plans to maintain as spend at this level in the current
year also.
Ad since any discussion today would be incomplete without
mention e word, the management plans to tap this new channel
of

marketing.

Beside

the

company

website

(i.e.

www.unilever.com), that the company has launched, it had also

entered into various marketing relationship with other portals,
specially targeted during festivals and events such as Valentines
day, etc.
Its a combination of spiffing up its key brand, researching and
improving the newer products that havent taken off, supported

with high ad spends that Hindustan Unilever(Ltd) hopes will see it

emerges stronger after the current slowdown, as well as expand
the market.

Positioning
In the 1970s consumers were ready to pay more for more, and
luxury goods flourished. In the 1980s, consumers began to demand
more for same, and the discounting era grew strong. Todays
consumer demanding more for less, and the winner will be that
super value marketers. Some of todays most successful
companies recognize those customers are more educated and able
to recognize true customer value
Positioning is simply concentrating on an idea or even a word
defines that company in the mind of the consumer. It is more
efficient to market one successful concept to one large group of
people than 50 product or service ideas to 50 separate group
repositioning is a must when customer attitude have changed and

product have strayed away from the consumers long standing

perception of them
Hindustan Unilever(Ltd) is an anchor in sea of consumer products.
As a variety of competitive claims assails her senses, today
customer uses complicated decision making process to assess the
alternative

before

making

purchase.

Since

Hindustan

Unilever(Ltd) is more clearly associated with a particular set of

attributes in terms of benefits and prices, the quicker becomes her
search process.
Positioning of individual product:
1) Lifebuoy is one of Unilevers oldest brands with more than a
hundred-year history, as www.unilever.com informs. Lifebuoy
has become more than just a red bar of soap today the
brand provides hygiene and health solutions for families
2) Fair & Lovely, a hot-selling fairness cream, which promises a
lighter skin tone for many of Indias complexion-conscious
consumers
.

HINDUSTAN UNILEVERS MARKET

SEGMENTATION
Market place for any product is comprised of many different
segments of consumers, each with different needs and wants.
Markets segmentation can be defined in a number of ways such as:
Demographic variables (e.g. Consumers are groups, gender,
material states income etc)
The lifestyle of consumers (i.e. their interests and activities)
the benefits which consumers look for in a product or on the
occasions when the product might be consumed.
Hindustan Unilever(Ltd) takes into account all these factors
when producing a range of products. It targets different
segments within the market, such as the:

 Break segment products which are normally consume as a

snatched break and often with tea and coffee.
Impulse segment these products are often purchase on
impulse, used these and then. They include product such as
close up.
Take home segment this describes product that are
normally purchased in supermarkets, taken home consumed
at a later stage.

The Real Taste of Rejuvenation

After having fought a bitter price battle for market share with its
rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the AngloDutch consumer goods company Unilever Plc, is now working on a
new growth strategy for its laundry business.
Price cut or hike is not a long-term growth strategy. Pricing, in
fact, is now passe, insists Sudhanshu Vats, category head, home
care.

Our strategy for growth, now is focused on product innovation,

new consumer and retail trends and aggressive marketing and
promotions, he said.
This comes even as Unilever is scouting for a potential buyer for its
laundry business in the US.
HUL says it is quite upbeat about the segment and says the
laundry segment is one of its key growth areas.
We have done key innovations across the product portfolio and it
is working for us, says Vats. We successfully migrated from Rin
Supreme to Surf Excel and Wheel Smart Srimatiwhich was rolled
out in 2006is also on the right track.
HULs market share in the laundry segment grew to around 37.8%
in the quarter ended June from 35.5% in the same period last year.
According to ACNielsen, the laundry industry in India was worth
Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesnt
report its laundry revenues separately but puts them under the
soaps and detergent category.
In 2006, HULs soaps and detergents segment contributed around
Rs5,596 crore to the companys total sales of Rs12,103 crore.

Laundry has been an attractive segment in the past and is likely

to keep growing in the near future. The recent price war between
companies led to erosion in their profitability but now, the industry
is stabilizing.

COMPETITIVE STRATEGY
As Competition Heats Up, Indias Top Consumer-Products Company
Woos Affluent Shoppers With Global Brands Like Dove, While
Cooking Up Its Foods Biz
The middle-aged Briton strolling the aisles and checking out the
products doesnt attract much notice from other shoppers in
Mumbais Hypercity, the India hypermarket chain. Thats how
Douglas Baillie likes it. Baillie, the managing director of Hindustan
Unilever, Indias premier consumer-products company, wants to

see how his products are stocked, what consumers are buying, and
how shoppers are reacting to competitive brands. Its primary
market research at its most elemental, and its best done
incognito.
Hindustan Unilever has traditionally relied on small traders and
mom-and-pop corner stores to retail its products. But Indias recent
retail boom has created large stores and malls, so the company
wants to make sure its in with the new marketing crowd. Hence
Baillies

Hypercity

visits,

and

the

calls

he

makes

on

the

headquarters of the big retail chains.

This is quite a change for Hindustan Unilever, whose executives
used to have emissaries make obeisance at Lever house in
downtown Mumbai. I cant imagine any head from Lever House
ever visiting other company offices like this, says an amazed
Damodar Mall, chief executive of innovation and incubation at
Pantaloon Retail, Indias largest retailer and a former manager at
Hindustan Unilever.

Facing Competition From P&G And Others

The reason for this new found egalitarianism is that the $3 billion
Hindustan Unilever is facing serious competition. The company,
which is practically synonymous with India, makes everything from
detergents, soaps, and shampoos to soups, sauces and tea, and
dominates most of those categories. Yet early this year, Finnish

handset maker Nokia (NOK) dislodged it as the multinational with

the highest revenues in India, after ringing up India-based sales of
$3.5 billion.
Now Hindustan Unilever is under siege from aggressive Indian and
foreign competitors such as Procter & Gamble (PG), Nivea, and
LOral. In the last year, ACNielsen data shows, Hindustan
Unilevers lead in hand soaps, including the popular Lux, is down
from 55.2% to 54%. Favorite detergent brands like Surf Excel and
Rin are barely hanging onto their 37% share. Hindustan Lever tea
brands like Brooke Bond and Lipton have dipped from a combined
market share of 29.2% to 24.3%.
All this has taken a toll on Hindustan Unilevers operating margins,
down from 21% a few years ago to just 11.84% now. Thats why
the company is wooing consumers in big retail stores. These newly
affluent shoppers present the best hope for the companys future
in India. According to retail consultant KSA Technopak, organized
retail, currently just 3.5% of Indias total $336 billion retail
market, will grow to 28% by 2017.
Hindustan Unilevers managers hope their revenues from big retail
will increase from 5% today to over 25% in 2012. It is a big game

for us, says D. Sundaram, Hindustan Unilevers finance director.

Hindustan Unilevers strategy is to market its premium products
through the hundreds of megastores springing up across India.
That

dovetails

with

parent

company

Unilevers

new

global

realignment of products.Parent Unilever will develop the brands

and streamline product offerings across the world, while its
subsidiaries will

sell the products.

This means that all of Unilevers brands will be available across

global markets, fitting in quite nicely with Indias turn towards
more international products being sold in supermarkets.
Yet this is still a dramatic change for Hindustan Unilever which, not
long ago, was the most successful and profitable company in the
Unilever group, the crown jewel whose managers had free rein to
develop and build brands suitable for the local market. The
takeover of Hindustan Lever by Unilever became evident in March,
2006, when Baillie, a Zimbabwe-born British national, became the
first foreigner in four decades to head the Indiancompany.

From Local Player To Multinational

Overnight the change sent shock waves through India. For many
decades most Indians thought Hindustan Lever was a local
company,

not

management

multinational,

graduates

and

made their

the

cream

careers

there.

of

Indias
Then

in

February, 2007, the company, then known as Hindustan Lever, was

rechristened Hindustan Unilever to reflect its parentage.

Baillie first had to sort out some past problems. For instance, in
2002 the company adopted Unilevers global strategy of focusing
on just 30 power brands instead of the total basket of 110 more
local brands. While the strategy aimed to conserve management
energy, it also left the field wide open for competitors to attack
Hindustan Unilever in the niche soap and detergent markets where
its smaller brands held sway.
And there was some stiff competition from rival Procter & Gamble;
a 2004 price war with P&G in the detergent business forced
Hindustan Unilever to slash prices on its premium brand Surf Excel.
The effect: The companys sales and operating profits stagnated at
$2.5 billion for five years while operating profit plunged 37%, to
$274 million in 2004. Last year operating profits reached $357
million, thanks to price increases. But the rich margins of the past
have

not

returned.

Tougher To Hold On To Market Share

Baillie says he intends to get the company back into the
competitive growth zone and do this in a manner that we can
consistently deliver. He also wants to expand the foods business
in conjunction with the parent, where foods bring in half the
revenues globally. In India, the companys home and personal care
businesses account for 80% of revenues and 85% of profits at

Hindustan Unilever, while the companys track record in foods has

been dismal. Indeed, it has phased out more food productswheat
flour, confectionery, frozen breadthan it has launched.
Hindustan Unilever executives are realistic about the new era in
which it now operates. Nitin Paranjpe, executive director in charge
of the home and personal care business, admits that its now
tougher to hold on to market share. If India is a great story, we
arent the only ones seeing it. Rivals like P&G and Nivea have also
copied Hindustan Unilevers best innovation: the small shampoo
sachets it pioneered in the 1980s, which sold for less than 2 cents
each and which expanded the market for Hindustan Unilever
products among Indias rural masses. Currently, 80% of Indian
shampoo sales come from sachets. But today even LOreal has
sachets of its Fructis shampoo.
In June, the Tata Groups beverage company Tata Tea overtook
Hindustan Unilever as Indias largest selling tea brand. According
to ACNielsen, Tata Teas market share increased from 16.7% in
March, 2006, to 19.9% in July, 2007, while Hindustan Unilever
slipped from 26.1% to 19.5%. Tata Tea is exultant. Managing

Director Percy Siganporia says the gain is a dream comes true for
us.

FUTURE COMPETITIVE STRATEGY

2010 Expectations
P&G, the world's largest consumer-goods maker, will continue to
gain share in the next five years in India, according to Ali Dibadj,
an analyst at Sanford C. Bernstein in New York, who rates the stock
``outperform.'' Hindustan Unilever Ltd., 52 percent owned by the
London- and Rotterdam-based parent, lost ground in shampoo,

bath soap, toothpaste and tea in the quarter ended Sept. 30,
compared with the year earlier, according to the company. Its
share of the shampoo market declined by more than a percentage
point to 47.7 percent, the company said.
ITC, the largest Indian cigarette maker and partly owned by British
American Tobacco Plc, is also making inroads. It started selling
more brands including Fiama Di Wills shampoo and Superia soap
last year as the government raised tobacco taxes.
`Profitable' Cigarettes
The tobacco maker ``has a very profitable cigarettes business
which will help it to invest and expand its personal- care portfolio,''
said Anand Shah, an analyst at Angel Broking in Mumbai, who has
a ``neutral'' rating on the stock. ``It has the ability to take losses in
this segment as long as it grows its sales. This strategy will still
satisfy investors.''
Rising prices of raw materials have made it more difficult for
consumer-goods makers to pass on higher costs. The price of palm
oil, used to make soaps and foods, has surged 70 percent in the
past year.

``Given the competition, profitability will continue to be under

pressure,'' said Macquarie Securities Ltd. analyst Unmesh Sharma,
who has an ``underperform'' rating on Hindustan Unilever. He
expects the stock to drop to 180 rupees ($4.57) in the next year
from 190.9 rupees. The company has a market value of about
$11.8 billion.
India is Unilever's biggest market in Asia, generating about 6
percent of annual sales. It has sold soap in the country since 1888
and controls about half of the sales of products such as skin
creams, bathing soaps and shampoo.

HUL-UNIQUELY
CREATE VALUE
Our strategy

Competitive strengths

POSITIONED

TO

 Innovation

and

R&D

capabilities

to

straddle

the

pyramid

Versatile distribution network

Strong corporate responsibility and governance

Strong local and talent base

Strategy
Grow ahead of the market by leading market development
activities.
Leverage positive impact of growing Indian economy on
consumer spending.
Grow a profitable foods and top end business.
Grow the bottom line ahead of the top line.

 Strong commitment

to sustainable development.

Competitive Strengths

Corporate Social Responsibility-Aiding In The

Development Of The Country

Shakti
Three shakti initiatives

Shakti entrepreneur; currently~44000 women cover

1,25000 villages.

Shakti vani: one-to-many communication for category

growth
ishakti:

customized

interaction

with

remote

consumers.

Impact of community
business and social impact can go together.
partnerships with diverse stakeholders.

HINDUSTAN UNILEVER LIMITED COMPARATIVE BUSINESS ANALYSIS

Hindustan Unilever Limited Formerly known as Hindustan Lever
Limited. The Group's principal activities are to manufacture and
market consumer products. The Group operates through seven
segments: Soaps and Detergents, Personal Products, Exports,
Beverages, Foods, Ice Creams and Other. The products include
home and personal care products, foods and beverages, industrial

and agricultural products. Home and personal care products

consists of personal and fabric wash, household, oral care, skin and
hair care, deodorants, perfumery, colour cosmetics and baby care.
Foods and beverages includes tea, coffee, cooking fats and oils,
bakery fats, ice creams, tomato products, fruit and vegetable
products,

rice,

salt,

atta

and

rawa,

marine

products

and

mushrooms. Industrial and agricultural products includes specialty

chemicals, bulk chemicals, fertilisers, animal feeds, seeds, plant
growth nutrients, processed-tri-glycerides and agri commodities,
yeast,

leather,

footwear

and

carpets,

thermometers

and

plantations.
This analysis compares Hindustan Unilever Limited with three other
companies in closely related industry sectors.
The company focuses on efficient delivery to consumers with an
improved supply chain, brand building initiatives and innovation,
which has helped the company to sustain its leadership position in
the overall FMCG category in India.
Its brands are spread across 20 consumer product categories.
Hindustan Unilever markets consumer goods throughout India. The

company faces competition from international, local and regional

players.

RURAL- THE BIG INDIAN ROMANCE

Rural population larger than europe(800 million)

Low growth in agriculture;however rural income are growing

faster with 70% population here,income growth is crucial.

Structural changes in the economy which are affecting this

are:
Disintermediation in the agricultural market price
discovery mechanism has benefited farmers.

 Government

grants

and

subsidies.employment

grants-Rs 40000cr

Did Hindustan Unilever Get Its Rural Pitch

Right?
A new book from Wharton School Publishing is critical of Hindustan
Unilevers advertising strategy in India.
HUL missed an opportunity for increased marketing productivity
when they repositioned, retargeted, and relaunched Lifebuoy,
write

Leonard

M.

Lodish,

Howard

L.

Morgan

and

Shellye

Archambeau, the authors of Marketing that Works. Though the

company was extremely innovative the way it handled the rural
communications plan was very traditional, they add.

The company basically worked with one agency, Ogilvy and

Mather (O&M), and screened some options to roll out one option
that everyone was happy with, reads an observation in a chapter
titled entrepreneurial advertising that works.
A better strategy, according to the authors, would have been to
develop a number of different communications executions using
different creative sources and then testing them as part of the
early rollout.
Advertising strategy came for mention when the company reported
the second quarter results, a few days ago. Mr D. Sundaram,
Director (Finance & IT), HUL, said: We have been phasing our
advertising spends depending on the launches and relaunches of
brands. The advertising spends have not been linear for the
company, he added. The companys advertising and promotional
spends during the quarter fell to Rs 336 crore, from the earlier Rs
345 crore.
Lifebuoy is one of Unilevers oldest brands with more than a
hundred-year history. Lifebuoy has become more than just a red

bar of soap today the brand provides hygiene and health

solutions for families, says the site, in a paragraph on innovation.
Differentiating soap products on the platform of health takes
advantage of an opening in the competitive landscape for soap,
reads a quote in the book from C.K. Prahalads The Fortune at the
Bottom of the Pyramid .
HUL, through its innovative communication campaigns, has been
able to link the use of soap to a promise of health as a means of
creating behavioural change, and thus has increased sales of its
low-cost, mass-market soap, Prahalad notes.
The O&M strategy, as explained by Mr Lodish et al, targeted
10,000 villages in nine states where HUL stood to gain the most
market share They spent a lot of effort in designing low cost
ways of communicating with their rural target.
The authors are of the view that government workers who have
been interacting with villagers might have come up with some
excellent ideas; or the villagers themselves might also be able to
generate very effective communications vehicles.

So, why didnt HUL try alternative campaigns when rolling out its
initiative? Probably the biggest reason is that they always did
their communications the same way even for innovative
programs, wonder the authors. As a big company, many times it
is difficult to change the procedures without creating significant
political problems.
The HUL example, which is one of the many discussed in the book,
concludes by stating that globally very progressive and innovative
firms can also benefit from being more entrepreneurial and less
traditional

in

how

they

manage

their

advertising

and

communication.

JOINT VENTURE
Hindustan Unilever Sets Up Joint Venture With
Smollan Holdings
Hindustan Unilever Limited (HUL) has decided to set up a Joint
Venture (JV) with Smollan Holdings of South Africa and the JV will
be operational from January 1, 2008. The strategic tie-up aims to
build long term capabilities and bring in-store execution focus in
servicing the Companys Modern Trade customers.

The new company has been named as Hindustan Unilever Field

Services Private Limited (HUFS) and will work exclusively on behalf
of HUL in Modern Trade channel only. The operations will begin
with the existing Modern Trade in-store execution team of HUL
moving into HUFS.
Smollan Holdings is one of the leading in-store execution and field
services companies internationally. It has leading edge capabilities
in servicing Modern Trade focused on shelf filling, logistics for
merchandising materials and in store execution.
Modern Trade in India is growing and evolving very rapidly and
our strategy for winning in this growing retail market is to win at
point-of-purchase with our shoppers & by delivering best-in-class
service to our Modern Trade customers. This JV will bring in world
class execution excellence in the market and build the right
capabilities to deliver the companys marketing strategy in Modern
Trade.

Other Acquisition
Hindustan Unilever has acquired several Indian FMCG companies
so far. This includes:

Tata Oil Mills Company

Brooke Bond

Lipton India

Modern Foods

It acquired Kissan brand from UB group; Dollops ice cream brand

from Cadbury India; Lakme cosmetics brands from Tata. It has also
launched Pureit, a home water purifier which supplies drinking
water without boiling/need of electricity.
Hindustan Unilever Network is the direct selling channel of the
company. It has about 350,000 consultants, all independent
entrepreneurs, trained and guided by HLN's expert managers and
trainers.

NEW INITIATIVE
Bringing High-End Dove To India
Baillie is fighting back. Over the past six months, Hindustan
Unilever launched a high-end range of Ponds skin care and Dove
hair care products from Unilevers international portfolio. These
premium brands retail not in neighborhood small stores but in
supermarkets and hypermarkets, where Indian customers love to
touch and feel products.

Hindustan Unilever is also milking one of its top brandsFair &

Lovely, a hot-selling fairness cream, which promises a lighter
skin, tone for many of Indias complexion-conscious consumers.
The advertising campaign, which suggests that regular use of the
cream helps women gain confidence and makes them eligible for
marriage, has made the brand a winner. That has spawned a host
of competitive fairness creams, soaps, and sunblock lotions. But
Hindustan Unilevers brand is still tops.
Baillie is also getting aggressive on foods, focusing on the Knorr
brand of soups and curry mixesideal for the Indian market.
Analysts believe the companys current strategy of concentrating
on premium products and marketing them in the large retail stores
is a winning one. Sumeet Budhraja, consumer analyst at Mumbai
brokerage First Global Securities, says that Hindustan Unilever
could have addressed a lot more categories, but they are more
focused and regaining their aggressiveness. He points to the
demand for safe drinking water in India, which Hindustan Unilever
exploited with the launch of water purifier Pureit in 2005, at onethird the price of established Indian brands such as Aqua guard.

These efforts have delivered some promising results, and Baillie is

pleased with the modest turnaround. In the quarter ended June,
2007, the companys sales grew 13%, with net profit up 29.6%.
Reason enough to keep patrolling those store aisles.

SERVICE TO SOCIETY
HUL believes that an organisation's worth is also in the service it
renders to the community. HUL is focusing on health & hygiene
education, women empowerment, and water management. It is
also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive,
and rural development. HUL has also responded in case of national
calamities / adversities and contributes through various welfare
measures, most recent being the village built by HUL in earthquake

affected Gujarat, and relief & rehabilitation after the Tsunami

caused devastation in South India.
In 2001, the company embarked on an ambitious programme,
Shakti.

Through

Shakti,

HUL

is

creating

micro-enterprise

opportunities for rural women, thereby improving their livelihood

and the standard of living in rural communities. Shakti also
includes health and hygiene education through the Shakti Vani
Programme, and creating access to relevant information through
the iShakti community portal. The program now covers 15 states in
India and has over 31,000 women entrepreneurs in its fold,
reaching out to 100,000 villages and directly reaching to 150
million rural consumers. By the end of 2010, Shakti aims to have
100,000 Shakti entrepreneurs covering 500,000 villages, touching
the lives of

over 600 million

people.

HUL is also running a rural health programme Lifebuoy Swasthya

Chetana. The programme endeavours to induce adoption of
hygienic practices among rural Indians and aims to bring down the
incidence of diarrhoea. It has already touched 70 million people in
approximately 15000 villages of 8 states. The vision is to make a
billion Indians feel safe and

secure.

If Hindustan Unilever straddles the Indian corporate world, it is

because of being single-minded in identifying itself with Indian
aspirations and needs in every walk of life.

PERFORMANCE REVIEW
Leadership Across

Diverse Fmcg Category

Record Performance

Financial Overview -2007

*FIGURES BASED ON FY 2007 AUDITED RESULTS

OBJECTIVE OF THE STUDY

 To identify the marketing strategies and policies of

Hindustan Unilever Limited
To analyse the influence of rival companys strategies on
the performance of Hindustan Unilever Limited
To analyse the various strategies adopted by the
company to gain competitive advantage

RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study
regarding the subject. As the prime objective of the project is to
compare

Hindustan

Unilever

Ltds(HUL)

with

the

existing

competitors in the market and the impact of Procter & Gamble

(PG), Nivea, and LOral on HLL, the research methodology
adopted is basically based on primary data via which the most
recent and accurate piece of first hand information could be
collected.
Primary data was collected by the
Questionnaire &
Personal Interview Method
Sources of secondary data :
Used to obtain information on, HUL and its competitor history,
current issues, policies, procedures etc, wherever required.
# Internet-www.unilever.com, www.Google.com
# Magazines-Business Today
# Newspapers-The Economic Times

Procedure of research methodology

# Target geographic area was Delhi.
# To these geographical area questionnaire was given, the
questionnaire was a combination of both open ended and closed
ended questions.
# The date during which questionnaires were filled was between
three week.
# Some dealers were also interviewed to know their prospective.
Interviews with the honour of retailer of HUL were also conducted.
# Finally the collected data and information was analysed and
compiled to arrive at the conclusion and recommendations given.

LIMITATIONS
While undertaking my study I was encountered with some
limitations:
Limited time was provided to complete the study.
Cost involved in collecting the data was high.

Target geographic area was limited to Delhi.

To fix an appointment with the dealers was also very

difficult task and even after that many time people
was not turn up for the appointment.

ANALYSIS

AND

INTERPRETATION

3rd

consecutive

yearof

accelerated

growth

in

FMCG

portfilio.Growth broad based and across all categories.

FMCG market expected to maintain current growth levels.
Successfully implement the food strategy.
Build momentum to the water business.
Build on competitive capabilities across the business system.
Manage cost inflation effectively to improve margin through
pricing,cost saving and better mix.
Strong commitment to governance and CSR.

CONCLUSION
This company project has demonstrated HINDUSTAN UNILEVERS
MARKETING STRATEGIES AND POLICIES that has proved to be
extensive through, and of great benefit to the company in
furthering its competitive advantage.
In this project it possible to see the success of Hindustan Unilevers
in its indorse its strong potential to continue to do well.

BIBLIOGRAPHY

A L Ries (1996), Focus Harper Collins Publishers Ltd.

David A. Aaker (1991), Managing Brand Equity, The Free

Press.

David A. Aaker (1996) Building Strong Brands, The Free

Press.

Philip

Kotler

(Eighth

Edition)

Marketing

Prentice Hall of India Ltd.

The Economic Times Brand Equity

Market survey and questionnaires

www.unilever.com

Management,

QUESTIONNAIRE
1. Do you use FMCG products?
Yes

No

2. Which brand of FMCG products do you use?

Hindustan Unilever
P&G
Nivea
Others

3. Where do you buy FMCG products from?

Super stores
Retail Stores
Others
4. Are you aware of any campaign of the above brands?

 Yes

No

5. Which Hindustan Unilevers product do you usually prefer or

use?

Bathing soaps

Skin care

Foods

Deodorants

others

6. Do you think Hindustan Unilevers product is easily available in

market ?
Yes

No

7. Describe Hindustan Unilever in one word?

8. Your comments on Hindustan Unilevers product?

_______________________________________________

CONTENTS
S NO. PARTICULARS

PAGE
NO.

Introduction

History

of

Hindustan

Unilever

Limited
3

Oganisational Structure

Present status

HULs new growth strategy

Product profile

SWOT analysis

PEST analysis

Future competitive strategy

10

HUL-comparitive business analysis

11

Joint Ventures

12

New initiatives

13

Research Methodology

14

Analysis

15

Conclusion

16

Bibliography

17

Questionnaire